This new pipeline will have a capacity of 570,000 barrels per day, almost half the production of the Bakken Field. A tank car holds about 700 bbls, so this pipeline would equal over 800 tank cars per day
Can anyone offer some insight regarding pipeline capacity vs number of trainloads per day or week?
The Dakota Access Pipeline is starting to bring in the pipe to the staging area, and expects to start construction after the first of the year, according to an article in today's Trains NewsWire:
http://trn.trains.com/news/news-wire/2015/09/04-keokuk
Status of the 2 Bakken pipelines: The Enbridge Sandpiper has received their Certificate of Need from the Minn. PUC, and they alrady have easments from 94% of the landowners; Energy Transfer Partners, Dakota Acceess Pipeline will have the Iowa Utilities Board hearing in November. If Keystone is also built, it would be surplus for the Bakken. Enbridge's eastern Canada project to bring Bakken all the way to the Alantic, is mearly reversing the flow direction again of the existing pipeline back to its original state.
With market forces both within and outside the petroleum industry - I don't think ANYONE has any real handle on what will happen in 5 years. With what I am seeing, they can't even forecast next week accurately.
Never too old to have a happy childhood!
What happened to the comments made by BNSF that they expected the north south transport of oil to mostly disappear in a few years as the new fields in west Texas come on line. Unfortunately I can't find the article. It was part of a discussion about the Keystone P/L and it's need.
Since it is the pipeline companies that are proposing the lines from the Bakken, they would have figured out what return they needed.
Condensate (the lightest crude oil) which is used to dilute bitumen from the Canadian tar sands is very plentiful now, and they are proposing to reverse the flow direction of a border crossing condensate line from western Canada, back to Canada. But I agree that tar sand butimen is a good candidate for hauling in steam coil tank cars. If they used regular tank cars to haul railbit, they could back haul the dilutant.
The pipelines going through Mn are maxed out right now. There has been several Star Tribune and Pioneer Press articles on the North Dakota oil boom since about 2008. In one article in the last year the state of North Dakota government doubled its estimate of the amount of oil that can be extracted and they said that there is 30+ years supply at the current rate of production. I don't know if a pipeline company can justify their investment with a minumum 30 year use. If it only lasts 30 years I'm guessing they might figure out a better way of getting the tar sands oil through pipelines with a better and cheaper diluting fluid.
Modeling the "Fargo Area Rapid Transit" in O scale 3 rail.
schlimm Given the choice of which opinion seems to have more expert research to support it as well as his first hand experience in the field, I would have to say my bet would be on that of Midland Mike. It tends to corroborate the opinions of oil investment experts, foreign policy gurus and a senior executive relative at the upstream side of Exxon-Mobil.
Given the choice of which opinion seems to have more expert research to support it as well as his first hand experience in the field, I would have to say my bet would be on that of Midland Mike. It tends to corroborate the opinions of oil investment experts, foreign policy gurus and a senior executive relative at the upstream side of Exxon-Mobil.
As Schlimm as been skeptical of my posts in past oil threads, this time I must have said something right. Thanks.
CMStPnP MidlandMike however, if you relook at the first chart in the first link, you will see that rail's market share of th Bakken crude hauling business went from 75% to 50% over the last couple of years, and the trend is continuing in the wrong direction. Because as admitted in the article several items are happening currently namely: 1. Decrease in per barrel oil price. 2. Oil production leveling off (namely because of #1 and less drilling). 3. Differential between selling price and cost to produce making transportation costs more relevant to the total equation. I am not a big fan of "if current trends continue" scenarios. Especially when it concerns the Middle East and Oil Production. ...
MidlandMike however, if you relook at the first chart in the first link, you will see that rail's market share of th Bakken crude hauling business went from 75% to 50% over the last couple of years, and the trend is continuing in the wrong direction.
Because as admitted in the article several items are happening currently namely:
1. Decrease in per barrel oil price.
2. Oil production leveling off (namely because of #1 and less drilling).
3. Differential between selling price and cost to produce making transportation costs more relevant to the total equation.
I am not a big fan of "if current trends continue" scenarios. Especially when it concerns the Middle East and Oil Production.
...
To answer your point (2.) first: in the 2 years that rail has been losing market share, production was rising during most of that period and only leveled off recently.
Points (1.) and (3.) so far relate largely to crude going to the Gulf and midwest, as that is where all the present pipelines go. As mentioned in the second link, the crude still going to the East Coast refineries apparently is to meet commitments. And as he points out, once the first Canadian pipeline reaches an Atlantic port, and a US East Coast refinery takes delivery of a load that costs less than half of CBR to ship, then other East Coast refineries will be compelled to follow to stay competetive. At that point it is about shipping costs, not world oil prices.
C&NW, CA&E, MILW, CGW and IC fan
MidlandMikehowever, if you relook at the first chart in the first link, you will see that rail's market share of th Bakken crude hauling business went from 75% to 50% over the last couple of years, and the trend is continuing in the wrong direction.
I personally do not believe that the largest Oil Criminal Enterprise on the face of the Earth (Russian Federation) will allow the above three trends to continue via the current geopolitical situation. They will once again find a way to spike Oil Prices for their own benefit. Secondly, it's been reported repeatedly that Saudi Arabia's over production and selling of Oil while having an impact on our production here in the United States is probably not going to have a long-term impact on our growth in Oil Production even though it is having short term impacts on it. Also, Economist reports that the Saudi strategy is unsustainable for more than 2-3 more years. Last but not least Iran's Oil back on the market. Will it have an impact? Unfortunately not immediately as many of Iran's Oil fields like Iraq's prior to the last war under the sanctions regime have fallen into bad repair and need a few years at least to recover their pre-sanctions regime production levels. I have my doubts that Iran will be able to hold it together internally for another 5-7 years if the Iran Nuke deal goes through and further agreements pass.....I think on the civilian pacification side they face a runaway train of expectations and eventual civil strife in the streets again which will impact Iran's Oil production.
Iraqi Oil production is being impacted by the battles with ISIL in part BUT most of Iraq's Oil fields are in the South and in close to the Iranian Border so a large part of them are protected still.
So yes, I still think the article is off base and it's projections rely on peace breaking out across the Middle East as well as the Russians being content with Oil selling under $80 a barrel and the Russians not trying to provoke or exacerbate an armed conflict somewhere to spike the price higher (to their benefit).
Myself, I think the Russians are very much opposed to the Iranian Oil having a dilutatory impact on the price of Oil overall. So watch carefully what they attempt to do next to keep the price of Oil high (another armed conflict or urging Iran to act as a military proxy, something along those lines). They will move on it.....if we pass the Nuke deal with Iran and Iran is poised to sell a larger quantity of Oil that might reduce the overall price.....Russians will try to counteract it at a minimum as they need the revenue.
Saudi over-production is going to stop at some point as they need revenue as well, although they are not as desperate as the Russians are now. It will be interesting to see what the next move is in the Middle East, have my doubts it will be a move towards peace. And really you cannot discuss the price of oil or production levels in the United States without discussing the Middle East political situation......which is what the Railway Age article attempts.
Euclid Regarding the title of this thread, how much of this shifting to pipelines will require pipelines that have not yet been built?
Regarding the title of this thread, how much of this shifting to pipelines will require pipelines that have not yet been built?
The 2 big pipeline hauls to the east are already built, but are to be repurposed. Enbridge East would change the flow direction on an existing oil PL (IIRC they are re-reversing it back to its original flow direction) so it would be a no-brainer. The TransCanada project would convert a natural gas line. This conversion would have to jump thru some regulatory hoops. These lines would connect to Atlantic ports. Because the trip to US East Coast refineries would be international, they could use low cost foriegn flagged tankers. There would also be some new connecting pipelines out of ND. Pipelines continue to be built out of the Bakken. Pipeliners hire environmental consultants that are smart enough to steer around legit environmental concerns, and I have not heard of one domestic pipeline yet that has been killed because of environmentalist. (remember Keystone is an international PL, which makes it a political football)
CMStPnP Yeah I would say I disagree with the original post as well. I don't see the shift and clearly railroads and tank car builders researched this issue heavily before being burned on another spending program that will come to naught in less than 10 years. I read somewhere that the tank car delivery gives the oil producers flexibility in destination as well as mixing that pipelines do not as well as these particular brands of crude being easier to transport by tank car because their viscosity is thicker........than by pipeline. Pretty sure the Oil Industry would have held off on investment as well if this was the case. So I would throw the BS flag on the original post. ...
Yeah I would say I disagree with the original post as well. I don't see the shift and clearly railroads and tank car builders researched this issue heavily before being burned on another spending program that will come to naught in less than 10 years. I read somewhere that the tank car delivery gives the oil producers flexibility in destination as well as mixing that pipelines do not as well as these particular brands of crude being easier to transport by tank car because their viscosity is thicker........than by pipeline. Pretty sure the Oil Industry would have held off on investment as well if this was the case.
So I would throw the BS flag on the original post.
Many of the arguements you give would cause one to think that Bakken crude should continue to ride the rails, however, if you relook at the first chart in the first link, you will see that rail's market share of th Bakken crude hauling business went from 75% to 50% over the last couple of years, and the trend is continuing in the wrong direction. (Note: the viscosity problem is with tar sands, not Bakken) Some of the companies still planning on new tank cars serve refineries on the West Coast, like Tesoro, where CBR is still expected to continue.
Apparently Railway Age did not think it was BS.
BaltACD schlimm With coal use fading now (also carloadings) and oil shifting to pipelines, the rails had better start adapting soon. That means better service tailored to customer needs, not running long, heavy, slow freights with no schedules or flexibility in delivery. You are out of touch with the rail service that is being provided. Changes that are being made are being made with customer knowledge and concurrence. Customers want low rates more than they want high speed delivery.
schlimm With coal use fading now (also carloadings) and oil shifting to pipelines, the rails had better start adapting soon. That means better service tailored to customer needs, not running long, heavy, slow freights with no schedules or flexibility in delivery.
With coal use fading now (also carloadings) and oil shifting to pipelines, the rails had better start adapting soon. That means better service tailored to customer needs, not running long, heavy, slow freights with no schedules or flexibility in delivery.
You are out of touch with the rail service that is being provided. Changes that are being made are being made with customer knowledge and concurrence. Customers want low rates more than they want high speed delivery.
I'm talking about new customers to replace current and prospective lost business. It requires some fundamental changes. High speed? No. Just not speeds similar to 100 years ago if you want new business. On your railroad (CSX?) for the week ending 8/7/15, overall speed was 19.9 mph. Intermodal was a blazing 26.1 mph. Terminal dwell time overall as 25.5 hours.
By way of comparison, the UPRR manages overall speed of 25.4 mph (25% faster) and intermodal 31.1 mph, but has a longer dwell time average of 28.4 hours.
Compare that to some European intermodal services, averaging speeds of 130-160 kmh (81-99 mph) or even higher.
As for the downturn in Coal shipments, it will be reversed once we switch out the current occupant of the White House. Some of our economy now is artificial and I think once we see a change in political administration and idealogy we will revert back to the real economy and our sub par GDP growth rates will disappear as well.
Not if the various Native American tribes in Minnesota have anything to say about it, and they do have plenty to say about it.
Enbridge does not have a stellar reputation around here.
schlimm MidlandMike Part one of RBN's series was extensivly quoted in a Railway Age article. RA did not seem to have any quibbles with the thesis of the blog. http://www.railwayage.com/index.php/management/is-bakken-cbr-fading-away.html?channel My impression is that RBN is a pretty respected source and Mike would know about that better than anyone else here.
MidlandMike Part one of RBN's series was extensivly quoted in a Railway Age article. RA did not seem to have any quibbles with the thesis of the blog. http://www.railwayage.com/index.php/management/is-bakken-cbr-fading-away.html?channel
Part one of RBN's series was extensivly quoted in a Railway Age article. RA did not seem to have any quibbles with the thesis of the blog.
http://www.railwayage.com/index.php/management/is-bakken-cbr-fading-away.html?channel
My impression is that RBN is a pretty respected source and Mike would know about that better than anyone else here.
I have to give credit to a poster on Fred Frailey's blog who made me aware of the RBN blog site a few years back. I have found them to be reliable and highly readable.
dakotafred Don't forget, according to all accounts, what made the rails attractive to Bakken producers, besides the lack of pipelines, was that the rails did not require longterm contracts, as pipelines do, and that they go -- right now -- to East and West Coast refineries that can handle that lighter oil, as the Gulf Coast refineries, where the pipelines go now, do not. I don't see anything in there that has has changed importantly in recent months. In North Dakota, new pipelines are meeting landowner resistance. The Obama administration continues to sit on the famous Canadian pipeline. Rails continue to offer flexibility, altho at a higher price. The only thing that has changed is a (temporarily) lower price for the crude. I think the Bakken will be a longterm cash register for the rails.
Don't forget, according to all accounts, what made the rails attractive to Bakken producers, besides the lack of pipelines, was that the rails did not require longterm contracts, as pipelines do, and that they go -- right now -- to East and West Coast refineries that can handle that lighter oil, as the Gulf Coast refineries, where the pipelines go now, do not.
I don't see anything in there that has has changed importantly in recent months. In North Dakota, new pipelines are meeting landowner resistance. The Obama administration continues to sit on the famous Canadian pipeline. Rails continue to offer flexibility, altho at a higher price.
The only thing that has changed is a (temporarily) lower price for the crude.
I think the Bakken will be a longterm cash register for the rails.
I think rail has proved itself, atleast as a niche player, in cases where pipeline infrastructure has not developed yet or not available going to the right place. Also the RRs not requiring take-or-pay contracts certainly had appeal, especially to independent producers. However, the articles show that the Bakkken business has been going back to pipelines. There is lots of refining capacity for light crudes on the Gulf coast. The path to the east coast will be those two other Canadian pipeline projects, that only involve repurposing existing lines for crude transport in an eastward direction. The famous Keystone pipeline is mainly for heavy tar sand crude, and has very little extra capacity for Bakken crude. If it is ever built, it will be so late to the party, that it has no baring on the present discussion. I don't doubt that there is some landowner resistance to pipelines, but the pipeliners are not adverse to using eminent domain. On the positive side, as the article pointed out, ther will still be a need for CBR to the Pacific Northwest.
I think a lot of folks are of the opinion that Bakken traffic is a flash in the pan (no pun intended), for a variety of reasons. That pipeline facilities were not in place is one - the product had to move and rail was the best (and most flexible) option. Trucks were out - we're already short of drivers, never mind suitable trailers in suitable quantities.
Another possibility is that Bakken would become uneconomical. Still another is that some other energy source would be found, or demand would drop.
Time will tell. The question of the moment becomes what will happen if both Bakken and coal drop off the map as sources of rail traffic.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
RBN Energy is merely a consulting firm. Translated, thats an opinion.
Jim Norton
Huntsville, AL
A series of articles in the RBN Energy blog predicts that new pipelines coming on line in 2017 will capture the remaining ND to Gulf crude oil traffic. Also a Canadian line to the east, with tanker port connections, will capture most of the East Coast refinery traffic in 2020. The only CBR that is safe is in the ND to Pacific Northwest lane, where the volume is too low to interest pipeline companies.
https://rbnenergy.com/the-end-of-the-line-could-bakken-crude-by-rail-shipments-disappear
https://rbnenergy.com/the-end-of-the-line-how-new-oil-pipelines-could-impact-bakken-east-coast-rail-shipments
https://rbnenergy.com/the-end-of-the-line-will-bakken-shipments-to-the-west-coast-continue
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